Magna, BAIC Group and the Zhenjiang government have signed a framework agreement governing an electric vehicle manufacturing joint-venture in Zhenjiang, China. The transaction, pending regulatory approval and other closing conditions, is expected to close in the fourth quarter of 2019. Yes, a state-owned publicly traded car company.
This joint venture, to be controlled by an affiliate of the BAIC Group, represents Magna’s first investment in a complete vehicle manufacturing facility outside Europe. It will combine Magna’s unique complete vehicle engineering and manufacturing expertise and BAIC’s local manufacturing, marketing and distribution footprint to support electric mobility in China. The facility has the capacity of up to 180,000 vehicles per year. (Chinese take 10% stake in Daimler. Unwelcome?)
China blew past the US in 2015 to become the world’s largest market for new-energy vehicles. Startups and traditional automakers are gearing up to meet the Communist government’s stated goal to increase sales of plug-in hybrids and fully electric cars by a factor of ten in the next decade. China, of course, has made electric vehicles a strategic initiative as part its increasingly successful drive to become a clear leader in automotive technology, increase air quality and decrease reliance on imported oil.
“Magna has proven experience building complete vehicles for customers,” said Günther Apfalter, President of Magna Europe and Magna Steyr
In June 2018, Magna and BJEV announced they would jointly engineer and build premium electric vehicles for customers in China. In January 2019, the two sides celebrated the opening of a new engineering center and announced the groundbreaking of a new NEV test center in Zhenjiang.
The first production of electric vehicles, BJEV’s ARCFOX models, is expected for launch in late 2020. The joint venture will also be capable of offering EV contract manufacturing services to other potential customers.